This summary was computer-generated without any editorial revision. It is not official, has not been checked for accuracy, and is NOT citable.
Facts
The New Mexico Taxation and Revenue Department levied interest and a civil negligence penalty on taxpayers for their late payment of 2019 personal income taxes. The taxpayers filed a formal protest, arguing that their inability to pay was not due to negligence. The administrative hearing officer abated the civil penalty, concluding that the taxpayers were nonnegligent and that the regulation provided a nonexhaustive list of nonnegligence situations (paras 1-2).
Procedural History
- Administrative Hearings Office: The administrative hearing officer affirmed the interest owed by the taxpayers but abated the civil penalty based on nonnegligence (para 1).
Parties' Submissions
- Appellant (New Mexico Taxation & Revenue Department): Argued that the administrative hearing officer's finding of nonnegligence was not supported by substantial evidence and that the officer's interpretation of the regulation was a departure from prior decisions, creating new tax policy (para 3).
- Appellees (Taxpayers): [Not applicable or not found]
Legal Issues
- Whether the administrative hearing officer's decision to abate the civil penalty was arbitrary, capricious, or an abuse of discretion.
- Whether the administrative hearing officer's interpretation of the regulation was in accordance with the law.
Disposition
- The New Mexico Court of Appeals affirmed the administrative hearing officer's decision to abate the civil penalty (para 7).
Reasons
Per Ives J. (Henderson and Baca JJ. concurring): The court found that the administrative hearing officer's decision was not arbitrary, capricious, or an abuse of discretion. The officer's interpretation of the regulation was based on its plain language, which provides a nonexhaustive list of nonnegligence situations. The Department failed to demonstrate that the officer's second rationale was erroneous or that the regulations relied upon by the Department pertained to the same subject matter as the regulation in question. The court also noted that the Department's arguments regarding the officer's authority and the interpretation of related regulations were not preserved for review (paras 2-6).